Group CEO Rob Shuter. Picture: FREDDY MAVUNDA
Group CEO Rob Shuter. Picture: FREDDY MAVUNDA

MTN and partners, including China Mobile Communications Group, have developed an entry-level smartphone costing just $20 (about R290) in a bid to boost internet penetration across its 22 markets.

Largely due to the high cost of entry-level data bundles and smartphones, only about a third of MTN’s 225-million subscribers in the Middle East and Africa used the internet regularly, group CEO Rob Shuter said in Cape Town on Tuesday.

Africa’s biggest mobile phone operator is aiming to sell about 10-million of the devices over the next three years.

Moving that many of its existing customers from basic handsets would be "a major boost for internet penetration", Shuter said.

Mobile operators are trying to grow internet traffic partly to offset a long-term decline in voice revenues.

Smartphone ownership in Africa remains well below the global average. According to a study by Pew Research Center, 51% of adults in SA owned smartphones in 2017, falling to 32% in Nigeria, 30% in Kenya, and just 13% in Tanzania.

The "world’s first 3G smart feature phone" was developed by MTN, operating software provider KaiOS Technologies, chip maker Unisoc and China Mobile, the world’s biggest mobile network operator.

Priced at $20, or slightly more in markets where import duties are high, the phone would cost about half of the next cheapest entry-level smartphone in most African markets, Shuter said.

MTN planned to start selling the device, which would come with its mobile money app, from the first quarter of 2019.

App opportunity

While the phones would not be made in Africa, their introduction would give local developers an opportunity to create apps, Shuter said.

Li Huidi, executive vice-president of China Mobile, said the partnership would be "a good foundation for co-operation between us in the future".

In September, China Mobile opened an office in Johannesburg and signed an agreement with MTN for a "strategic alliance relationship".

The Chinese state-owned operator said at the time that the two companies would collaborate on "international business expansion, international transmission interconnection and network resources sharing".

Chinese telecommunications groups are increasingly looking to Africa for growth.

Huawei Technologies, for instance, is building two distribution warehouses and a research & development lab in SA as part of its ambition to be the biggest seller of high-end smartphones in the country by the end of 2019.

Huawei ranks third in SA — behind Samsung and Apple — in terms of sales of smartphones priced at $600 (about R8,500) or more.

"This year we estimate our shipments will exceed 2-million [in SA] … Next year will be more," Zhao Likun, head of Huawei’s devices business in SA, said in a recent interview.

hedleyn@businesslive.co.za